Venture capital is widely viewed as “good” capital: it takes risks, promotes innovation, actively engages with company management and often invests for the long term.
As the US National Venture Capital Association (NVCA) says in its 2016 yearbook: “Venture capital has enabled the United States to support its entrepreneurial talent and appetite by turning ideas and basic science into products and services that are the envy of the world.”
Of the 1,339 US public companies founded since 1974, 42 per cent have been backed by venture capital. Those VC-funded companies now account for 63 per cent of market capitalisation and 85 per cent of research and development among that post-1974 cohort.